The Theory of Cognitive-Conditional Conservatism in Accounting

Mathematics

RicardoLopes Cardoso¹  Rodrigode Oliveira Leite² 

[1] Brazilian School of Public and Business Administration, Getulio Vargas Foundation, Rua Jornalista Orlando Dantas, 30, sala 206, Rio de Janeiro 22231-010, Brazil;COPPEAD Graduate School of Business, The Federal University of Rio de Janeiro, Rua Pascoal Lemme 355 Office 423, Rio de Janeiro 21941-902, Brazil;

关键词: accounting conservatism;    cognitive reflection;    cognitive-conditional conservatism;   

DOI  :  10.3390/math8091552

来源: DOAJ

【 摘 要 】

Literature from multiple fields in psychology and economics have identified that impulsive individuals are more prone to riskier behavior and are less conservative. Accounting literature has studied conservatism for many years, and demonstrated that there are two roots of conservatism, one unconditional and another conditional to news available at decision-making. However, there is no bridge linking both. Using an analytical model, we show that the conservatism level of an accountant is lower for impulsive individuals because of their reduced focus on future consequences of their decisions, which is coupled with an increased focus on present consequences. Hence, we put forward a theory of “cognitive-conditional conservatism”, that is, a third root of conservatism. Additionally, we also prove the asymmetry property of this behavior.

【 授权许可】

Unknown